Michael J. Rosen

Michael J. Rosen is President of ML Innovations, Inc., a fundraising and marketing consulting firm serving nonprofit organizations and the companies that assist them. An AFP Certified Master Trainer and winner of the prestigious AFP/Skystone Prize for Research, Michael is the author of the bestselling book "Donor-Centered Planned Gift Marketing."

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Can Direct Mail Secure Impressive Planned Gifts?

I’m about to tell you how you might generate a $137,000 average gift in a direct mail campaign. That would be nice, wouldn’t it? And, I’m not talking about getting a lot of $25 donors and one, lucky-to-get, $1 million donation. Instead, I’m going to share with you what the Natural Resources Defense Council did to achieve a real six-figure average gift through direct mail.

The NRDC achieved its remarkable result by using direct mail to secure planned gifts, specifically charitable bequest commitments. While your results may differ, the fact is you, too, can reap massive rewards by using direct mail for planned giving.

Photo by Michael J. Rosen

Many nonprofit organizations either think that one cannot use direct mail to solicit planned gifts successfully or that doing so is somehow inappropriate. That’s assuming they give it any thought at all. But, I’m reminded of a great quote from Philip J. Murphy, of Zimmerman Lehman, that I used in my book Donor-Centered Planned Gift Marketing: “Get wild with planned giving: Think of it as fundraising!” Murphy was saying that planned giving is just like annual giving and capital campaigns, it’s fundraising; and, the same rules apply. So, if you can use direct mail for an annual fund or capital campaign appeal, of course you can use it for planned giving.

Just like with any other type of campaign, face-to-face is the absolute best way to secure a planned gift. However, what happens when you have far more planned giving prospects than you do people to go and see the prospects? That was exactly the dilemma faced by the NRDC.

With a gift planning staff of one director, two officers, and one assistant, the NRDC did not have the staff resources to see the 50,000 planned giving prospects identified among its 1.3 million supporters. So, the best prospects were assigned to staff and the tens of thousands of others were put into the direct mail effort. The first half of the direct mail campaign yielded 87 bequest commitments with 62 donors willing to reveal the amount of their commitments which totaled $8.5 million, for an average of $137,000. In addition, the NRDC secured an additional $330,000 from a challenge grant supporter.

If you would like to see all of the elements of the NRDC direct mail package, you can find it here.

The NRDC certainly treats planned giving like fundraising. They use face-to-face where they can. Then, rather than ignoring the remaining 50,000 prospects, they’ve used direct mail to broadcast the importance of planned gifts to the organization and to solicit those gifts.

People who requested more information or who made a commitment were carefully contacted by staff. Donors will continue to be cultivated through the NRDC’s legacy society and, when appropriate, staff will talk with bequest donors about other giving opportunities that might effectively meet the needs of donors while allowing them to further support the cause. As a result, the NRDC has dozens of happy, new planned gift donors. The NRDC will also have millions of dollars more with which to defend our natural resources. Money it otherwise would not have had.

If you want more planned gifts for your organization, ask more people. Direct mail can help you do that, tastefully and successfully.

22 Responses to “Can Direct Mail Secure Impressive Planned Gifts?”

At the risk of being crossed off your Hanukkah card list, I feel compelled to respond to this week’s blog post. Since I know you to be a intelligent thinker, skilled fundraiser, and person of integrity, I can only conclude that you were heavily medicated when praising NRDC’s bequest campaign. To be accurate, the campaign did NOT “generate a $137,000 average gift.” The only funds actually raised was the $330,000 match. Until the bequests “mature,” they are merely expectancies, unsecured and far from certain.

Here’s what I didn’t like about the campaign:

(1) The appeal was misleading, if not outright deceptive. The letter and collateral materials were carefully wordsmithed to give the impression that there would be a dollar-for-dollar match, doubling the value of the donor’s bequest. Nowhere did NRDC indicate that the match was only ten cents on the dollar, or limited to $10,000 per donor. With the need for transparency today, the lack of clear disclosure is unacceptable.

(2) The expectations are unrealistic. Overwhelmingly, most wills are written with everything going to a surviving spouse, and the charitable bequests made in contingent or residuary form. If the spouse or other named heirs survive, or if the estate isn’t as large as anticipated, the charities could receive nothing.

(3) Seeking dollar-denominated bequests is misguided. With current life expectancies, many of the bequests will be worth a fraction of today’s value when they mature. Fundraisers should be encouraging donors to name charities for a percentage of the estate instead, so the value of a bequest will automatically keep pace with any growth in the donor’s net worth.

(4) Being named in someone’s will doesn’t signal the end of a fundraiser’s task. Consider that the typical will being probated today is the sixth revision, and that the personal computer makes it as easy to rewrite the entire will as it is to add a codicil. So, although it was rare for an individual to remove a charity from a will 30 years ago, it is not uncommon today. Displease a donor, fail to maintain communication or keep them informed, or express inadequate appreciation, and you may be written out of the will. With typical staff turnover, this is a distinct possibility.

All this is not to say that bequests should not be promoted. Indeed they should, but not through direct mail, and with better planning.

I could go on, but the pancakes have set off the smoke alarm and even the dog is coughing. Got to go, but you get the idea.

Jeff, as always, I thank you for sharing your thoughts. You’re quite correct when you point out that the $137,000 average is an average revocable commitment and not cash in the door. While the NRDC has no way of knowing how many of the commitments will be realized and what the ultimate value will be, they firmly believe the outcome will be millions of additional dollars.

You and I have disagreed in the past about how reliable bequest commitments really are. You suggest that very few will actually be realized. However, the conventional wisdom is that once a charity is included in someone’s will, the likelihood of the charity being removed is actually quite low. For example, a study by The Stelter Company in 2009 found that fewer than 1 in 10 individuals take a charity out of their will.

While the NRDC attempted to value each bequest commitment, those commitments were not necessarily dollar-denominated. When someone has included the organization in his or her will for a percentage of estate gift, the NRDC asked for an estimate of what that value would be. In other cases, the individual did indeed prefer to specify a particular dollar amount. This was donor-driven rather than NRDC-driven.

You are also correct when you state, “Being named in someone’s will doesn’t signal the end of a fundraiser’s task.” That’s why the NRDC follows-up with every individual making a bequest commitment. It’s why they include these folks in their legacy society. The NRDC understands the importance of good stewardship. Effective stewardship will help retain the bequest commitment and can also help set the stage for securing additional gifts and commitments.

I also agree with you that the NRDC direct mail appeal is disturbing in the way it describes the details of the challenge grant. While the precise terms of the challenge might be difficult to succinctly explain in the context of the direct mail appeal, the NRDC should have made a better effort to be more accurate.

I’ll wrap-up by saying, once again, that if organizations want more planned gifts, they need to ask more. It would have been foolish for the NRDC to have simply ignored or passively marketed to its 50,000 planned giving prospects that staff would be unable to visit. As a result of the direct mail campaign, the NRDC will receive realized gifts that they otherwise would not have. And, they will have the opportunity to work with those who made a commitment to explore other giving opportunities and additional gifts.

Finally, I can’t believe that in your lengthy comment, you chose not to say anything about my bear photo. I took it myself in Alaska. And, you just ignored it. Sigh. 🙂

Once again your post is full of great advice and good examples. I love the enclosed letter and the part about the challenge. Do you know the details of the challenge? Was it a certain amount per each bequest notification up to $1,000,000 or a dollar for dollar (so many people do give a specific dollars amount)?

I’m further impressed by the picture you took of that bear. I hope you were up in a tree or using a zoom lense!

Lorri, thank you for your kind words and for taking the time to comment. The NRDC obtained a $1 million challenge grant for its planned giving campaign. The challenge grant matched bequest commitments at a rate of 10 percent up to $10,000 per commitment. If a commitment was made, but the amount remained undisclosed or unestimated, the commitment would be matched with a challenge gift of $150. Unfortunately, the NRDC mailing did not accurately discuss the terms of the challenge match which is very disappointing.

Thank you for taking notice of my bear photo while Jeff Steele completely ignored it. Jeff, you can learn something from Lorri about art appreciation. 🙂 I took the shot in Alaska using a superzoom lens. I was also with a well armed guide. Fortunately for all, the bear was more interested in the salmon than us.

Aaron, thank you for your comment. While using direct mail for planned giving is not a common practice, the NRDC is not alone. Other charities have used direct mail to solicit planned gifts. For example, the American Civil Liberties Union did a similar successful appeal that pre-dated the NRDC effort. When putting together a direct mail appeal for planned giving (or really any direct mail appeal) remember to keep it donor-centered. And, remember that face-to-face is always the best way to go. Use the mail only when face-to-face is not possible.

Michael,
My apologies. I was so distracted by the NRDC mailings glaring deficiencies that I was oblivious to the bear photo. I applaud your courage.

Wildlife photography is extremely competitive, however, so if you really want to establish your bona fides in that area, it might require taking a photo of the bear’s tonsils without a zoom lens. Conversely, fundraising has pretty much become a race to the bottom. The “conventional wisdom” you allude to in paragraph 2 is, unfortunately — and deservedly — an oxymoron.

Jeff, I accept your apology. As for my nature photography, I am happy enough with my amateur status. By the way, most of my nature photography is about breathing rather than photo taking. When I hike in national parks, I go with a friend of mine who is in much better shape than I. So, whenever I feel a need for an oxygen break, I stop to ostensibly take a picture. It took years before my buddy caught on to what I was really doing. My quest for air does have a benefit: I’ve been able to take some nice nature shots as souvenirs of my adventures.

Debbie, thank you for the comment and, of course, for the nice comment on the photo! Regarding using the phone to seek bequest intentions, I am a huge advocate of this. However, there are significant variations in the services being offered by professional service providers. Not all service providers provide a good product. And, depending on the needs and culture of a particular nonprofit organization, some service providers will be a better fit than others. By the way, one of the services I offer my clients is helping them find the service provider to best meet their particular needs. One final thought: Whether using direct mail or the telephone to secure bequest intentions, the organization will need to have the infrastructure to properly follow-up with and steward these individuals. If that infrastructure is not in place, then an expanded bequest marketing effort should NOT be pursued.

Michael, I just want to emphasize the importance of that “final thought” you had for Debbie: “the organization will need to have the infrastructure to properly follow-up with and steward these individuals. If that infrastructure is not in place, then an expanded bequest marketing effort should NOT be pursued.”

If a charity seeks bequest intentions, they must then remain in a continual stewardship mode or risk alienating and losing the commitment they secured. Nowadays people DO — and not so infrequently as commonly believed — remove charities from their wills when they are taken for granted, ignored or displeased.

I would also recommend that the callers in the telephone bequest program be staff and/or volunteers, not paid solicitors who will not be able to properly field unrelated questions that will inevitably come up.

Jeff, thank you for your comment underscoring my point about the importance of solid stewardship. It’s a point that certainly should be underscored. Without a robust stewardship effort, any development program would suffer. However, I think that planned giving, in particular, would suffer greatly for the reasons you’ve stated. As for your recommendation that nonprofit organizations that use the phone to secure bequests should use in-house staff or volunteers, I just have to say that I think it depends. It depends on the quality, experience and training of the in-house staff or volunteers, and it depends on the outside service provider. For example, I once conducted an annual fund test using volunteers versus the paid callers of an outside service provider. The volunteers ended up being twice as expensive when factoring in the cost of foregone revenue. An organization looking to use the phone in its planned gift marketing effort needs to consider its goals and explore all of its options in order to determine the appropriate course of action for that particular organization. Interestingly, before seeing your comment and this response, Christina Attard posted a comment strongly supporting the use of service providers for phone programs for planned giving.

Haven’t looked at the material for this particular campaign and I agree that valuation is always tricky, but 100% agree that larger planned gift mail/phone campaigns can be really useful in certain circumstances. I’ve found that the phone component is essential to these campaigns, but would not skip doing direct mail even if the phoning was not possible.

I also 100% agree that the plan and infrastructure for following up on the good leads has to be in place for this to succeed. My last campaign was a full 1-year cycle from planning to implementation to follow-up and it was the follow-up that was as intensive as all the rest. One way that I’ve seen this structured is for the mailing and the phoning to be staggered. If there is a huge pool that would be unmanageable, plan the project over a two-year period and create segmented mailings and calls.

I’ve led these projects internally and also hired external companies to run the process and my comment would be that sometimes the consulting cost for an external provider seems huge. There is a temptation to go in-house, but I would only suggest this if you feel that would give your organization a better chance of success. Staff time and costs of an in-house campaign can easily catch up with that consultant price – so beware of making a decision that is penny-wise but pound-foolish!

Direct mail is a great way to sort out who is really interested and who isn’t when the size of the prospect list is unmanageable. Everyone ends up happy – the committed donors get the personal attention they need and want and those who choose to give elsewhere have a chance to express their disinterest and have that be respected.

Thank you for the post and the discussion!
(and of course for your bear photo!)

Christina, thank you very much for your comment post which is particularly timely given Jeff Steele’s comment on the subject of phoning for planned gifts. I appreciate your insight. You are quite correct that direct response programs can identify planned gift donors as well as those not interested or only marginally interested in making a planned gift. But, another advantage is that once planned gift supporters are identified, future contact can lead to additional current gift support and even other planned gifts.

I also want to thank you for taking notice of and mentioning my bear photo. 🙂